(Bloomberg) — The CV isn’t quite what you’d expect for someone who’s about to handle the finances of the mighty JPMorgan Chase & Co.
Long before Jeremy Barnum was promoted to chief financial officer, he was fired over a trading mishap — by JPMorgan. He later parted ways with hedge fund BlueMountain Capital Management over another market blunder.
But then began Barnum’s second act. JPMorgan lured him back in 2007 with a vague mandate to help with its credit-trading operations — shifting from free-wheeling, big-money-wagering roles to the nuts and bolts of the operation. Soon after, Daniel Pinto, now Chief Executive Officer Jamie Dimon’s top lieutenant, took a liking to Barnum, helping his ascent.
Lots of people bounce back, but Barnum’s rise to CFO of the banking giant is an unlikely Wall Street tale. He helped pioneer credit derivatives, got tossed out of trading roles at sell-side and buy-side firms, refocused on tackling risks and won benefactors in JPMorgan’s top rungs.
“Most people on Wall Street have some form of career setback in their life, and recovering from it is what makes them better in their job,” Troy Rohrbaugh, JPMorgan’s head of global markets, said in an interview.
Parts of Barnum’s resume read like those of many others in Wall Street’s corridors of power: Born in New York, attended the elite Groton boarding school in Massachusetts, then went on to college at Harvard.
But before making his way to Groton, Barnum, 48, spent his youth in a bohemian neighborhood of Barcelona with his pianist mother, picking up Spanish and Catalan, and listening to a spectrum of economic debate that included anarcho-syndicalism — a far cry from the Reaganism that dominated American politics at the time.
“You get to know him a little bit and he’s just different than all the other Groton and Harvard people,” said Gus Christensen, a former banker who left Wall Street for politics. They’ve been friends since joining the bank together in 1994, when Barnum, armed with a chemistry degree, showed up in a second-hand Brooks Brothers suit.
Christensen and others noted that Barnum’s time overseas had left him talking differently from his peers. “He speaks like a movie actor in the 1930s — he has a little bit of a lockjaw. It’s not a way of speaking in English that I had heard from anyone else in my generation,” Christensen said. “It’s much more subtle now than it was then.”
JPMorgan declined to make Barnum available for comment. This description of his career is based on interviews with more than a dozen current and former colleagues.
Stalin Henchman
After a half-decade on desks handling foreign-exchange options and emerging-markets derivatives, Barnum landed in 1999 on the credit-derivatives team, where he could put his prowess with math and structuring to work. That placed him at the nexus of rapid change in the market — and within JPMorgan itself.
The firm was pioneering credit-default swaps, contracts that work like insurance to reimburse investors if a borrower fails to pay up. It was also in the midst of mergers and acquisitions that would culminate in 2004 with its combination with Jamie Dimon’s Bank One Corp.
That year, JPMorgan’s results in fixed income faltered. When Barnum’s team lost a bundle, his name was added to a list of dismissals as the bank’s bosses set out to restructure the unit. He sent coworkers a tongue-in-cheek farewell email recommending that they closely study the career of Joseph Stalin’s henchman Lavrentiy Beria and get really good at PowerPoint.
Barnum was soon snapped up by BlueMountain, which named him head of its London office in 2005. The next year, the fund took a bath on wrong-way credit bets linked to Liberty Global Inc.’s Cablecom Holdings, prompting another ouster for Barnum. In a statement at the time, a senior BlueMountain executive said Barnum’s exit was “mutually agreed.”
Dodging Bullets
Then came the uncanny turnaround. JPMorgan gave Barnum a second chance and a new mission: Instead of making wagers himself, Barnum would use his trading experience and the lessons he learned to help oversee businesses, spot risks and head off trouble. He rejoined JPMorgan in 2007, right as two of Bear Stearns Cos.’ hedge funds were blowing up.
By 2010, Barnum was indispensable to his bosses and on the rise, having helped the firm dodge bullets from the financial crisis. Two years later, Barnum became CFO of the global-markets division, and the following year was elevated to finance chief of the entire corporate and investment bank.
He helped clean up one of Dimon’s biggest headaches — the so-called London Whale trading scandal, in which a group that was supposed to oversee the bank’s excess cash lost billions on botched credit-default swap bets. JPMorgan’s antagonist in the debacle happened to be BlueMountain, Barnum’s former employer. The lender ended up relying on the hedge fund to help resolve the positions and put the issue to rest.
Pinto, who oversees the firm’s investment bank, was named last week to become the sole president and chief operating officer at the end of the year. And, in the same announcement, Dimon elevated Barnum to CFO.
Some are keen to see how Barnum interacts with analysts and investors. He’s known to love a good debate, and is rarely at a loss for words.
“He’s the kind of guy, you would be sitting at a dinner table and talking about Russian politics in 1913, and he would still know more about it than you,” said Shahraab Ahmad, who worked for Barnum during his first stint at JPMorgan.
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